{"id":2729,"date":"2014-03-27T12:52:44","date_gmt":"2014-03-27T07:22:44","guid":{"rendered":"http:\/\/teekhapan.wordpress.com\/?p=2729"},"modified":"2014-03-27T12:52:44","modified_gmt":"2014-03-27T07:22:44","slug":"wake-up-upa-central-planning-didnt-work-for-soviet-union-it-wont-work-for-you-either","status":"publish","type":"post","link":"https:\/\/vivekkaul.com\/2014\/03\/27\/wake-up-upa-central-planning-didnt-work-for-soviet-union-it-wont-work-for-you-either\/","title":{"rendered":"Wake up UPA. Central planning didn\u2019t work for Soviet Union, it won\u2019t work for you either"},"content":{"rendered":"

\"upa\"<\/a>Vivek Kaul\u00a0<\/span><\/span><\/span><\/p>\n

In the last ten years that the Congress led United Progressive Alliance(UPA) government has run this country, its solution for almost every socio-economic problem facing this country, has been bigger government. This was a practice followed by the erstwhile Communist countries all over the world, particularly the Soviet Union. And there was a basic reason behind why the system did not work.
\nDiane Coyle explains this point in her new book <\/span><\/span><\/span>GDP \u2013 A Brief But Affectionate History<\/i><\/span><\/span><\/span>. As she writes \u201cThe communist countries had centrally planned economies, not market economies. Ministries in Moscow set the figures for the total number of all items to be produced in the economy and cascaded that down to specific production quotas for different industries and individual factories. With the benefit of hindsight we can see that the idea bureaucrats could possibly known enough about a large, complex economy to plan it from the center successfully is ludicrous.\u201d
\nCoyle further explains why central planning did not work. \u201cIndividual factories were set output targets by the planning ministry. These were expressed in terms of volume\u2014number of TV sets or pairs of shoes\u2014or even weight. Targets of this kind are easy to meet. It doesn’t matter what the shoes are like, whether they are durable, comfortable, in the right sizes for the majority of wearers, or stylish. It doesn’t matter whether the TV sets work after six months or if the panel at the back constantly falls off.\u201d
\nWhile India is no longer centrally planned to this extent, but our love for central planning has persisted. Take the case of the Right to Education which was introduced in 2009. At the heart of the Act is a noble idea of ensuring that education is a human right that should be free and compulsory for all children between the ages of 6 and 14.
\nBut like is the case with all big bang centrally planned initiatives the Act tries to achieve too many things at once. It ordered schools to have infrastructure like playgrounds and toilets. Again noble ideas which easy to mandate by law, but difficult to implement immediately.
\nMany \u201cbottom of the pyramid\u201d kind of private schools have been providing education at a rock bottom fee. If they are asked to suddenly create adequate infrastructure which meets the criteria set under Right to Education, their cost of operation goes up. Their only option is to pass on this cost and increase the fee that they charge.
\nThe trouble is that even though most parents want to educate their children, they may not be in a position to pay the higher fees.<\/span><\/span><\/span>A recent article on www.bbc.com <\/span><\/span><\/span><\/span><\/span><\/a>deals with precisely this issue. It quotes Gitanjali Krishnan, a teacher in a school in Panchsheel Enclave in New Delhi as saying that the school would have to triple student fees to meet the criteria set under the Right to Education. And this is something that parents of the children studying in the school won’t be able to afford. \u201cOur parents are the poorest of the poor, labourers and migrant workers, they won’t be able to afford it,\u201d she said.
\nThis has led to a scenario where schools are simply shutting down. \u201cBaladevan Rangaraju, director of think tank India Institute, who has been monitoring media reports, has counted 2,692 schools shut and 17,871 at risk,\u201d the BBC article said.
\nState governments are also shutting down schools which don’t meet the criteria set under Right to Education. The thinking among bureaucrats seems to be that in private schools the quality of teaching is not guaranteed. This is a rather stupid argument given that if the teaching in government schools was good, then the government employees and bureaucrats would be sending their sons and daughters to these schools, which is not the case.
\nAlso, shutting down schools is not a solution. Even if the education offered by private schools is not upto the mark, isn’t some education better than no education? <\/span><\/span><\/span>As Parth J Shah, founder president of the Centre for Civil Society writes in a blog <\/span><\/span><\/span><\/span><\/span><\/a>\u201cActually many government schools themselves would not be able to meet the rigid input norms((like playground, classroom size and teacher-student ratio) that the Right to Education has mandated.\u201d
\nFurther, what the Right to Education does like all centrally sponsored scheme is to set a target. And the target is to complete the syllabus. Economist Abhijit Banerjee talked about this sometime back. He conducted a small experiment in Bihar and the results were astonishing. \u201cWe did one experiment in Bihar which was with government school teachers. This was in summer around two years ago. The teachers were asked that instead of teaching like you usually teach, your job for the next six weeks is to get the children to learn some basic skills. If they can\u2019t read, teach them to read. If they can\u2019t do math, teach them to do math. At the end of six weeks, these teachers were given a small stipend. They had also been given a couple of days of training. At the end of six weeks, the children had closed half the gap between the best performing children and the worst performing children. They had really improved enormously,\u201d said Banerjee.
\n<\/span><\/span><\/span>So what was happening here? The teachers did not have to complete the syllabus in this case. They had to teach students what the students did not know. As Banerjee put it \u201c<\/span><\/span><\/span><\/em>The reason was they were asked to do a job that actually made sense. They were asked to teach the children what they don\u2019t know. The usual jobs teachers are asked to do is teach the syllabus \u2013 which is very different. Under the Right to Education Act, every year you are supposed to cover the syllabus,\u201d said Banerjee.
\nCentral planning essentially tries to implement what should be the best outcome. But that is easier mandated by the law than implemented in reality. As Banerjee put it \u201cOne thing that we forget is that the perfect is the enemy of the good. We are trying to have an education system that is perfect and that every child should come out with wisdom at the end of it and as a result they learn nothing.\u201d
\nMoving beyond the Right to Education, let’s take the case of the food security scheme, which aims at providing subsidised rice and wheat to nearly 82 crore Indians or 67% of the total population. Again, a big Act which tries to achieve the impossible.
\nGovernment data over the years has clearly shown that the percentage of hungry people is very low. <\/span><\/span><\/span>An article\u00a0<\/span><\/span><\/span><\/span><\/span>in the Mint points out<\/span><\/span><\/span><\/a>\u00a0<\/span><\/span><\/span><\/span>\u201cA February[2013] report of the National Sample Survey Office (NSSO) shows the proportion of people not getting two square meals a day dropped to about 1% in rural India and 0.4% in urban India in 2009-10. Interestingly, the average cereal consumption of families who reported that they went hungry in some months of the year (in the month preceding the survey) was roughly equal to the average cereal consumption of those who reported receiving adequate meals throughout the year.\u201d
\nHence, what people need is not subsidised rice and wheat, but food that is more nutritious. Howarth Bouis, director of HarvestPlus, International Food Policy Research Institute (IFPRI), made a very interesting point\u00a0<\/span><\/span><\/span>in an interview to the Mint<\/span><\/span><\/span><\/span><\/a> in 2013. \u201cIf you look at all the other food groups such as fruits, vegetables, lentils, and animal products other than milk, you will find a steady increase in prices over the past 40 years. So it has become more difficult for the poor to afford food that is dense in minerals and vitamins,\u201d he said.
\nNo steps have been taken to tackle this problem. Over and above this other factors also need to be taken into account. As a research paper titled National Food Security Bill: Challenges and Options<\/a> authored by economists belonging to the belonging to the Commission for Agricultural Costs and Prices (CACP), which is a part of the Ministry of Agriculture points out \u201cWomen\u2019s education, access to clean drinking water, availability of hygienic sanitation facilities are the prime prerequisites for improved nutrition. It needs to be recognised that malnutrition is a multi-dimensional problem and needs a multi-pronged strategy.\u201d
\nThis means taking many small steps in the right direction, which necessarily don’t involve big government and more central planning.
\nTo conclude, the Congress led UPA government is spending its last six weeks in power. And if there is one lesson it can draw from its last ten years in power is that Soviet style central planning doesn’t really work any more and perhaps it never did.
\nThe article originally appeared on www.FirstBiz.com<\/a> on March 27, 2014 <\/span><\/span><\/span><\/p>\n

\u00a0(Vivek Kaul is a writer. He tweets @kaul_vivek)<\/p>\n","protected":false},"excerpt":{"rendered":"

Vivek Kaul\u00a0 In the last ten years that the Congress led United Progressive Alliance(UPA) government has run this country, its solution for almost every socio-economic problem facing this country, has been bigger government. This was a practice followed by the erstwhile Communist countries all over the world, particularly the Soviet Union. And there was a … <\/p>\n

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